NRG Energy Bullish Despite Weak 2010 Results

Charlie Anderson submits:NRG Energy had a mediocre 2010 by every generally accepted accounting metric. Revenue and earnings dropped on a 10% decline in net margin (see earnings results here and earnings call transcript here). A major reason for this was pricing pressures created by collapsed natural gas prices. Despite very unexciting 2010 results, NRG Energy is still a good investment based on the thesis article I wrote here. There is a silver lining to the bad 2010 results. Revenue was down a little over a percent and earnings dropped a jaw-dropping 50%. As a point of comparison, Exelon's (EXC) revenue was up 7.5% over 2009, and earnings were down 5%. The major driver of this huge earnings drop at NRG was a billion dollar rise in cost of sales despite flat revenue. This can be attributed to the integration of acquisitions among other factors. Now back to that elusive silver lining. NRGComplete Story »

Related

By Achilles Research:Exelon (EXC) is an electrical utilities firm operating in 47 states in the US and Canada and is one of the largest power generators in the country. The shares of Exelon have dropped to what I believe is a sustained subsistence level and could offer dividend investors an interesting entry point. Exelon operates in a highly regulated market that has fallen on hard times lately.

Charlie Anderson submits:NRG Energy's (NRG) mediocre first quarter was made to look much worse by the writedown of the large STP 3&4 nuclear project. The first quarter's earnings per share of -$1.06 will make it difficult for NRG to produce good full-year 2011 results, even though operations have improved. The pipeline looks good going forward, and management has reaffirmed guidance. Earnings per share were down from $0.22 in 2010 to -$1.06 last quarter.

With the Fed decision just one day away, followed the very next day by the increasingly more irrational BOJ, stocks had no desire to make significant moves and overnight's boring session was the result, as European stocks and U.S. index futures rose modestly but mostly hugged the flatline while Asian declined 0.2% for a third day as raw-material shares declined and Tokyo equities slumped before central bank meetings in the U.S. and Japan this week. China’s stocks rose the most in almost two weeks, up 0.6% but failed to rise above 3000 on the Shanghai Composite, in thin trading.

NEW YORK/LONDON: Gold dropped almost two percent to a near six-year low on Friday, set for a sixth straight weekly decline under pressure from a firm US dollar and prospects of a US interest rate rise next month. Spot gold hit $1,052.46 an ounce, its lowest since February 2010, and was down 1.3 percent at $1,057.50 by 12:59 p.m. EST (1759 GMT). Spot prices were down about 2 percent for the week. US gold futures hit a six-year low of $1,051.10 an ounce before closing down 1.3 percent at $1,056.20 and skidding to a sixth straight weekly decline. Gold was hit by the dollar's advance.

The Dow Jones US Airlines index was the best-performing index in the US last year. Delta Air Lines, Inc. led gains among US carriers, seeing its stock price more than double in 2013. In a continuation of the airline industry’s strong performance last year, the AMEX Airline Index (XAL) has risen nearly 18% so far this year, even though the S&P 500 Index (SPX) has managed to gain only 2%.

By Anthony Grossi:About two years ago I wrote a lengthy piece recommending Exelon (EXC), and I was disastrously wrong. Not only has the stock price been in a never ending nose dive, but they had to cut the dividend, which seriously undermines the purpose of owning an utility in the first place.

By Dividendinvestr:T. Boone Pickens is the founder and chairman of the hedge fund BP Capital Management. Pickens invests 90 percent in oil and gas equities and 10 percent in commodities. Pickens has worked nearly 40 years in Mesa Petroleum, which he founded in 1956.

By Sneha Shah:When we started analyzing Duke Energy (DUK), we thought it was a safe bet during volatile times. However, as we went deeper into the company's business model and performance, we found that DUK has some big risks as well.
Introduction